DBS branch singapore

DBS Raised FHRs Across The Board

Last week DBS announced on its website across-the-board adjustment of its Sing Dollar Fixed Deposit rates from 7-month to 60-month tranches on 24 August, which will also hit all DBS home loans tied to its popular FHR peg. 

The announcement on DBS’s website (reproduced here) as follows:

DBS increase FHR Aug 2018

This latest move from the market leader comes after rate hikes to selective tranches announced last month by its two other local rivals in the mortgage business OCBC and UOB, which was also reported in this blog.  Homeowners will be receiving letter notifications from the bank soon and the new rates should apply after a one-month notice as required.

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With rate hikes coming fast and furious now almost every other month, since the start of 2018, I am not surprised almost every single FDR home loan peg in the market has been adjusted this year, some by more than one time in the space of a few months.  It is no wonder most clients are jumping on the bandwagon of fixed rate home loans in recent weeks.  Before we go on, here’s a quick summary on the exact impact to affected customers who are on DBS floating rate housing loans:

BankMortgage Peg*Date*Old RateNew RateIncrease By
DBSFHR824 Aug0.200.500.30
DBSFHR924 Aug0.500.800.30
(ave of
12 & 24M)
24 Aug0.80
0.60 (12M)
1.00 (24M)
0.80 (12M)
1.15 (24M)
DBSFHR1824 Aug0.800.950.15

*FHR is the original tranche FHR launched by DBS in 2014 defined as ave between 12M and 24M FD which has increased from 0.60 to 0.80 and from 1.00 to 1.15 respectively.

No one likes a higher monthly repayment, however when tides are rising, all ships eventually go for those on floating rate mortgages.  The speed of increases this year (where the local banks take turns to raise its mortgage pegs) has caught many by surprise, but the magnitude of increase has by and large stayed within an average of 0.30% for most.  And if you look at how SIBOR itself has increased (see purple line below) in past 6 months from 1.10% to 1.63% (as at 6 Aug), the banks are simply playing catch up.

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With the latest economic indicators coming out from US indicating continued strong growth, US Fed is poised to hike in its FOMC next month (we will bring you our summary report and analysis here so watch this space). All the signs seem to point to further liquidity crunch, which has seen all the banks here rolling out numerous deposit promotions over the last few months in a bid to bring in more funds. It is fair to say, barring any unforeseen events, mortgage rates look set to go further north in the near future.  Homeowners who are near their lockin expiry will do well to start looking around for the best fixed rates and take action quickly before it rises above 2%.

And there is no better time to do that now by reaching out to us here at MortgageWise.sg – we can offer you a zero-cost option for refinancing subject to min loan $500,000 (terms apply).  By all means do get a repricing quote from your current bank first, and let us run the numbers and see if it makes sense to switch. There are many mortgage lenders out there hungry for your business.  That is the beauty of free market!

If you act fast, we can still get you 3-year fixed rate at 1.90% or 2-year fixed rate at 1.68% (with some conditions attached).  Speak to our consultants to find out more how it works.

Since 2014, MortgageWise.sg has provided thought leadership in the mortgage planning space in Singapore, taking deep dives into the latest trends in the industry, providing useful mortgage tips, and making sense of rate movements.  We aim to build trust with clients for longer-term partnership and not just do product-pushing for a one-time deals unlike bankers. That’s why we always present “whole-of-market” perspective including packages that banks do not pay us.

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